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Tuesday, September 9, 2014

Pradhan Mantri Jan Dhan Yojana: LIC Seeks Clarity On Insurance

The much hyped Pradhan Mantri Jan Dhan Yojna (PMJDY), a
financial inclusion scheme launched recently by Prime Minister Narendra Modi,
has some modalities to be worked out on the premium payment and claims payment.
The state-run insurance firm Life Insurance Corporation (LIC) of India, which
will be offering Rs 30,000 protection cover to all those who open zero balance
bank account under the financial inclusion scheme by January 26, 2015.

The insurer had a meeting with officials from the ministry of finance to get
clarity on the collection of premiums and administration of the scheme.

As per the sources, there have been talks of having a minimal payment for this
scheme by the individuals. The process of claim settlement could be done
through the Aam Aadmi Bima Yojana (AABY), a social security scheme administered
by LIC. AABY members are between 18 years and 59 years. Here, the member should
be the head of the family or one earning member of the below poverty line
family or marginally above the poverty line under identified vocational
group/rural landless household.

The premium to be charged initially under the scheme is Rs 200 a year per
member for a cover of Rs 30,000, out of which 50 per cent is subsidised from
the Social Security Fund . In case of Rural Landless Household, the remaining
50 per cent premium is borne by the state government or Union territory; in
case of other occupational group, the remaining 50 per cent premium is borne by
the nodal agency and / or member and / or state government / Union territory.

Along with protection cover of Rs 30,000, PMJDY will also provide personal accident cover of rupees one lac to all individual, for which the National
Payments Corporation of India (NPCI) has signed a three-year agreement with
private general insurer HDFC Ergo.

Account holders under the scheme would get a RuPay debit card launched by NPCI.
Cardholders would also get an overdraft facility of up to Rs 5,000.